Best Stocks – Sizemore Insightshttp://charlessizemore.com
by Charles Lewis Sizemore, CFAFri, 16 Nov 2018 13:59:45 +0000en-UShourly1https://wordpress.org/?v=4.9.8Best ETFs for 2018: This Isn’t the Year for Emerging Markets (DVYE)http://charlessizemore.com/best-etfs-for-2018-this-isnt-the-year-for-emerging-markets-dvye/
http://charlessizemore.com/best-etfs-for-2018-this-isnt-the-year-for-emerging-markets-dvye/#respondFri, 21 Sep 2018 16:46:08 +0000http://charlessizemore.com/?p=13815The following is an excerpt from Best ETFs for 2018: This Isn’t the Year for Emerging Markets (DVYE). Well, I should probably start this by mentioning that I no longer personally own the ETF I recommended in InvestorPlace’s Best ETFs for 2018 contest. I recently sold my shares of the iShares Emerging Markets Dividend ETF […]

Well, I should probably start this by mentioning that I no longer personally own the ETF I recommended in InvestorPlace’sBest ETFs for 2018 contest.

I recently sold my shares of the iShares Emerging Markets Dividend ETF (DVYE). While I still believe that emerging markets are likely to be one of the best-performing asset classes of the next ten years, it’s a minefield in the short-term. As I write this, the shares are down 4% on the year. That’s not a disaster by any stretch, but it is a disappointment.

There are a couple reasons for the recent underperformance in emerging markets. To start, the U.S. market remains the casino of choice for most investors right now. Adding to this is dollar strength. While dollar strength is good for countries that sell manufactured products to the United States, it’s bad for commodities producers, as a more expensive dollar by definition means cheaper commodities.

President Donald Trump’s trade war isn’t helping either. While it’s hard to argue that anyone truly “wins” a trade war, Trump isn’t incorrect when it says that our trading partners need us more than we need them. In a war of attrition like this, you “win” by losing less.

Of course, these conditions are not new, and virtually all of them were in place when I made the initial recommendation of DVYE. None of these factors would be enough for me to punt on emerging markets just yet. No, the problem is a greater risk that has only recently popped up: the twin meltdowns in Argentina and Turkey.

]]>http://charlessizemore.com/best-etfs-for-2018-this-isnt-the-year-for-emerging-markets-dvye/feed/0Best Stocks for 2018: Enterprise Products Is a Keeperhttp://charlessizemore.com/best-stocks-for-2018-enterprise-products-is-a-keeper/
http://charlessizemore.com/best-stocks-for-2018-enterprise-products-is-a-keeper/#respondFri, 21 Sep 2018 16:41:32 +0000http://charlessizemore.com/?p=13812The following is an excerpt from Best Stocks for 2018: Enterprise Products Is a Keeper. A 14% return is nothing to be ashamed of in a year where the S&P 500 is up only 8%. Yet it looks awfully meager when my competition in the Best Stocks contest is up 144%. As I write, my […]

A 14% return is nothing to be ashamed of in a year where the S&P 500 is up only 8%. Yet it looks awfully meager when my competition in the Best Stocks contest is up 144%.

As I write, my submission in InvestorPlace’sBest Stocks for 2018 contest — blue-chip natural gas and natural gas liquids pipeline operator Enterprise Products Partners (EPD) — is up 14%, including dividends, as of today. Yet Tracey Ryniec’s Etsy (ETSY)is up a whopping 144%. Chipotle Mexican Grill (CMG)and Amazon.com (AMZN) take the second and third slots with returns to date of 71% and 68%, respectively.

So, barring something truly unexpected happening, it’s looking like victory may be out of sight this time around.

Can’t win ‘em all.

While Enterprise Products may finish the contest as a middling contender, I still consider it one of the absolute best stocks to own over the next two to three years. Growth stocks have dominated value stocks since 2009, but that trend will not last forever. Value and income stocks will enjoy a nice run of outperformance — and when they do, Enterprise Products will be a major beneficiary.

]]>http://charlessizemore.com/best-stocks-for-2018-enterprise-products-is-a-keeper/feed/0Best Stocks: EPD Ready for the Second Quarterhttp://charlessizemore.com/best-stocks-epd-ready-for-the-second-quarter/
http://charlessizemore.com/best-stocks-epd-ready-for-the-second-quarter/#respondMon, 02 Apr 2018 15:26:40 +0000http://charlessizemore.com/?p=13631The following is an excerpt from Best Stocks 2018: Enterprise Products Partners L.P. Is Still Strong, originally published on InvestorPlace. I can’t say I’m happy to be finishing the first quarter in last place in InvestorPlace’s Best Stocks for 2018 contest. But I’ve been here before. In the 2016 contest, I was dead last by the end of the first quarter, […]

I can’t say I’m happy to be finishing the first quarter in last place in InvestorPlace’sBest Stocks for 2018 contest.

But I’ve been here before.

In the 2016 contest, I was dead last by the end of the first quarter, and at one point in time I was down by more than 70%.

Yes, you read that right. My pick that year — midstream pipeline operator Energy Transfer Equity (ETE) — was sitting on a 70% loss. But by year end, it had made back all of those losses and finished the year with a 53% gain — handing me the Best Stocks crown in the process.

Then, as now, the entire pipeline sector had just come off of a brutal bloodletting. As I write this, many of the blue chips in the space are down 20%-30% from their 52-week highs.

But by the second quarter, the fear started to dissipate, and buyers began to return to the market. 2016 ended up being a good year for the sector, and I expect that 2018 will be as well.
Now let’s take a look at my entry for 2018, blue chip MLP Enterprise Products Partners (EPD). Enterprise, like the rest of the MLP sector, has taken its lumps and is down about 9% year-to-date. But news for the company has generally been positive. The company beat analyst expectations for both revenues and earnings last quarter and raised its distribution nearly 4%.

]]>http://charlessizemore.com/best-stocks-epd-ready-for-the-second-quarter/feed/0Emerging Markets Set to Take the Lead?http://charlessizemore.com/emerging-markets-set-to-take-the-lead/
http://charlessizemore.com/emerging-markets-set-to-take-the-lead/#respondThu, 29 Mar 2018 14:35:31 +0000http://charlessizemore.com/?p=13623The following is an excerpt from Best ETFs for 2018: iShares Emerging Markets Dividend ETF Is Still in the Race. If there is a dominant theme in the Best ETFs for 2018 contest, it would seem to be “Go America!” and specifically “Go American tech!” The Market Vectors Semiconductor ETF (SMH) is leading the pack, up 7%, and four […]

If there is a dominant theme in the Best ETFs for 2018 contest, it would seem to be “Go America!” and specifically “Go American tech!”

The Market Vectors Semiconductor ETF (SMH)is leading the pack, up 7%, and four of the top five places are all held by ETFs specializing in tech or biotech.

But we still have a long way to go in 2018, and tech is starting to show signs of breaking down as we finish out the quarter. I expect my pick – the iShares Emerging Markets Dividend ETF (DVYE) to ultimately take the crown.

The U.S. market has been the undisputed winner of the post-2008 bull market. Since March 2009, the SPDR S&P 500 ETF (SPY) is up about 240%. The iShares MSCI EAFE ETF (EFA) and the iShares MSCI Emerging Markets ETF (EEM)— popular proxies for developed foreign markets and emerging markets, respectively — are up 111% and 142% over the same period.

But with that outperformance has come major overvaluation. The U.S. market is the most expensive major market in world based on the cyclically adjusted price/earnings ratio, or “CAPE” (only tiny Denmark and Ireland are more expensive). The U.S. market trades at a CAPE of 31 … which is the level it reached in late 1997, in the midst of the dot com bubble.

Meanwhile, emerging markets are downright cheap. As a sector, emerging markets trade at a CAPE of less than 18, and many individual countries are even cheaper. Brazil trades at a CAPE of 14, and Russia 7.

]]>http://charlessizemore.com/emerging-markets-set-to-take-the-lead/feed/0Best Stocks for 2018: Enterprise Products Off to a Slow Starthttp://charlessizemore.com/best-stocks-for-2018-enterprise-products-off-to-a-slow-start/
http://charlessizemore.com/best-stocks-for-2018-enterprise-products-off-to-a-slow-start/#respondWed, 21 Mar 2018 22:49:27 +0000http://charlessizemore.com/?p=13608Alas, Enterprise Products Partners (EPD) is off to a rough start. I’m squarely in LAST place with a loss of 5%. Between rising bond yields and a rough year for energy stocks in general, EPD has gotten dragged down along with the rest of the MLP sector. But we still have a long way to […]

Source: InvestorPlace. Data as of 3/21/2018. Past performance no guarantee of future results

Alas, Enterprise Products Partners (EPD) is off to a rough start. I’m squarely in LAST place with a loss of 5%.

Between rising bond yields and a rough year for energy stocks in general, EPD has gotten dragged down along with the rest of the MLP sector.

But we still have a long way to go in 2018, and I epect a strong finish. Barring a tech stumble, it’s going to be hard for me to catch up. But win or lose, I expect EPD to generate a decent return. And if I were going to buy and hold any of the stocks on this list for the next five years, it would be EPD.

]]>http://charlessizemore.com/best-stocks-for-2018-enterprise-products-off-to-a-slow-start/feed/0Best Stocks for 2018: Emerging Markets in the Racehttp://charlessizemore.com/best-stocks-for-2018-emerging-markets-in-the-race/
http://charlessizemore.com/best-stocks-for-2018-emerging-markets-in-the-race/#respondWed, 21 Mar 2018 22:27:19 +0000http://charlessizemore.com/?p=13602As we wind down the first quarter, my pick in InvestorPlace’s Best ETFs for 2018 — the iShares Emerging Markets Dividend ETF (DVYE) — is up a respectable, though not spectacular, 5%. At this stager of the game, Dana Blankenhorn is off to a strong start, up 13% in the Market Vectors Semiconductor ETF (SMH). But it’s […]

At this stager of the game, Dana Blankenhorn is off to a strong start, up 13% in the Market Vectors Semiconductor ETF (SMH).

But it’s still early, and we have a lot of time left in 2018. Tech stocks have lead the U.S. market higher for years, and that trade is looking long in the tooth. Meanwhile, emerging markets have been in the doldrums for years and have only recently started moving higher again. I’m betting that emerging markets prove to be the best trade for 2018… and likely the next five years.

]]>http://charlessizemore.com/best-stocks-for-2018-emerging-markets-in-the-race/feed/0Best Stocks for 2018: Enterprise Products Off to a Slow Starthttp://charlessizemore.com/best-stocks-2018-enterprise-products-off-slow-start/
http://charlessizemore.com/best-stocks-2018-enterprise-products-off-slow-start/#respondMon, 12 Feb 2018 14:36:53 +0000http://charlessizemore.com/?p=13534My pick for 2018 — Enterprise Products Partners (EPD) — is off to a slow start. But we still have 10 and a half months left in 2018, and it’s anyone’s game. Here’s my rationale for choosing EPD: Best Stocks for 2018: Enterprise Products Partners L.P. Will Grow in 2018 May the best stock win!

]]>http://charlessizemore.com/best-stocks-2018-enterprise-products-off-slow-start/feed/0General Motors Just Warming Uphttp://charlessizemore.com/general-motors-just-warming/
http://charlessizemore.com/general-motors-just-warming/#respondMon, 18 Sep 2017 13:31:47 +0000http://charlessizemore.com/?p=13412The following is an excerpt from Best Stocks for 2017: General Motors Company (GM) Is Just Warming Up As we near the end of the third quarter, General Motors Company (GM) — my pick in InvestorPlace’s Best Stocks for 2017 contest — is putting up a respectable fight. As I write this, the shares are […]

As I write this, the shares are up 12% year to date, 13% with dividends, which puts me in fifth place. That’s nothing to get excited about, but it does put me at even with the S&P 500.

I don’t like matching the market. I prefer to kick the market’s tail. And I expect that GM will do exactly that as we close out 2017.

To start, valuations are ridiculously low. GM and its peers are being priced as if the entire industry is at risk of imminently going out of business. GM is priced at 6.8 times expected 2017 earnings and 0.33 times annual sales.

Yes, auto sales are notoriously cyclical, and automakers often appear to be cheap when actually expensive (and vice versa) due to the wild variability in earnings. So, let’s smooth out some of that variability by doing a modification of the Shiller P/E, or the cyclically-adjusted price/earnings ratio (“CAPE”).

Doing a true Shiller P/E requires 10 years of data, and GM was reorganized only in 2010. Though Benjamin Graham, who invented the CAPE methodology decades before Robert Shiller looked at it, recommended using between five and 10 years’ worth of earnings data, so we’re fine here.

Using earnings data from 2010 to 2016, General Motors would have a modified CAPE of just over 10. The same figure for the S&P 500 is over 25.

Again, I would agree that GM deserves to trade at a discount to the broader market. But doesn’t a 60% discount seem a bit extreme?

]]>http://charlessizemore.com/general-motors-just-warming/feed/0Best Stocks for 2017: GM Closing the Leadhttp://charlessizemore.com/best-stocks-2017-gm-closing-lead/
http://charlessizemore.com/best-stocks-2017-gm-closing-lead/#respondFri, 01 Sep 2017 17:57:58 +0000http://charlessizemore.com/?p=13348With four months left to go in 2017, my pick — General Motors (GM) — is at least putting up a respectable fight. When I last did an update two months ago, I was in 7th place with a measely 6% year-to-date return. I’ve now moved into 5th place with a slighly more respectable 10% […]

Source: InvestorPlace Data as of 9/1/2017; Past performance is no guarantee of future results.

With four months left to go in 2017, my pick — General Motors (GM) — is at least putting up a respectable fight. When I last did an update two months ago, I was in 7th place with a measely 6% year-to-date return. I’ve now moved into 5th place with a slighly more respectable 10% year-to-date return.

Unfortunately, my competition hasn’t been standing still. Louis Navellier’s Nvidia (NVDA) has jumped another 7% and is not up 61% year to date. And Brett Owens’ CoreSite Realty (COR) rallied an additional 14% and is now up 53% for the year.

Winning this will be tough. I’d need for GM to enjoy a monster rally (which I do expect) and for Nvidia and CoreSite to both roll over and die (which I consider less likely).

]]>http://charlessizemore.com/best-stocks-2017-gm-closing-lead/feed/0General Motors (GM): STILL Have Some Catching Up to Dohttp://charlessizemore.com/general-motors-gm-still-catching/
http://charlessizemore.com/general-motors-gm-still-catching/#respondMon, 31 Jul 2017 17:09:02 +0000http://charlessizemore.com/?p=13272 We’re now seven months into the contest, and I still have some catching up to do. My 6% year-to-date return in General Motors (GM) isn’t anything to be embarassed about… that is, until you see Albemarle (ALB), CoreSite Realty (COR) and Nvidia Corporation (NVDA) are all up well in excess of 30%. We still […]

We’re now seven months into the contest, and I still have some catching up to do. My 6% year-to-date return in General Motors (GM) isn’t anything to be embarassed about… that is, until you see Albemarle (ALB), CoreSite Realty (COR) and Nvidia Corporation (NVDA) are all up well in excess of 30%.

We still have five months to go… and a lot can happen between now and December 31. General Motors has been pushing higher since mid-May, up about 10% in just two-and-half months. And remember, we’re getting paid handsomely to wait for this investment thesis to play out via the 4.3% dividend.